Access Charge Reform; Price Cap Performance Review for Local Exchange Carriers; Transport Rate Structure and Pricing; Usage of the Public Switched Network by Information Service and Internet Access Providers

The Notice of Proposed Rulemaking (NPRM) begins a review of the Commission's interstate access charge rules, together with its price cap rules, to establish fair rules of competition for both the local and long distance markets and determine the extent to which it must revise these rules in light of the local competition and Bell Operating Company entry provisions of the 1996 Act and state actions to open local networks to competition, the effects of potential and actual competition on incumbent LEC pricing for interstate access, and the impact of the Act's mandate to preserve and enhance universal service. The Commission outlines two possible approaches for addressing claims that existing access charge levels are excessive, for establishing a transition to access charges that more closely reflect economic costs, and for deregulating incumbent LEC exchange access services as competition develops in the local exchange and exchange access markets. The first approach is a market-based approach under which the Commission would rely on potential and actual competition from new facilities-based providers and entrants purchasing unbundled network elements to drive prices for interstate access services toward economic cost. The second approach is a prescriptive one under which the Commission would specify the nature and timing of the changes to the existing rate levels.